Indian banks have reportedly proposed introducing a simple “Yes-No” confirmation prompt for high-risk UPI person-to-person (P2P) transfers as an additional safeguard against rising digital payment frauds. The proposal seeks to strike a balance between maintaining UPI’s hallmark speed and convenience while providing customers with an opportunity to verify suspicious transactions before funds are credited to the beneficiary.

Unlike blanket security measures that could slow down all digital payments, the proposed mechanism is designed to intervene only when a transaction is assessed as high-risk by the bank’s fraud detection systems.

Why the Proposal Matters

The Unified Payments Interface (UPI) has transformed India’s digital payments ecosystem by enabling instant, round-the-clock fund transfers. However, its growing popularity has also made it a prime target for cybercriminals employing sophisticated fraud techniques, including:

• Social engineering and phishing attacks
• Fake customer support calls
• Impersonation of bank officials or government agencies
• Coercion and intimidation tactics
• Fraudulent requests to transfer money urgently

Given the irreversible nature of instant fund transfers, banks are exploring preventive measures that can help customers pause and reconsider suspicious transactions before they are completed.

How the ‘Yes-No’ Confirmation Would Work

Under the proposed framework, a payment app or the bank’s fraud monitoring system would assess each transaction in real time. If a transfer is identified as potentially risky, the customer would receive a simple confirmation prompt asking whether they wish to proceed.

The proposed workflow is expected to operate as follows:

• “Yes” – The transaction is processed immediately.
• “No” – The transaction is cancelled.
• No Response – The transaction is completed only after a one-hour delay, allowing additional time to detect or prevent fraudulent activity.

This approach introduces a minimal level of friction only when warranted, while preserving the seamless payment experience for routine transactions.

Transactions Likely to Trigger the Prompt

The proposed confirmation would not apply solely based on transaction value. Instead, it would rely on risk-based assessment using behavioural analytics and fraud detection models.

Examples of transactions that may trigger the prompt include:

• Transfers initiated during unusual hours.
• Payments to a first-time beneficiary.
• Transfers to a newly opened bank account.
• Transactions initiated from a new or unrecognized device.
• Payment patterns that deviate significantly from the customer’s normal behaviour.

By leveraging intelligent risk assessment, banks aim to identify genuinely suspicious transactions without inconveniencing customers making legitimate payments.

Applicable Only to P2P Transfers

Importantly, the proposal is limited to person-to-person (P2P) UPI transfers and does not extend to person-to-merchant (P2M) payments.

This distinction is intended to ensure that routine merchant transactions—such as retail purchases, bill payments, and business payments—continue to be processed without additional confirmation prompts, thereby preserving the efficiency of India’s digital commerce ecosystem.

A Targeted Alternative to Universal Payment Delays

The proposal also reflects an evolving policy discussion on balancing fraud prevention with payment efficiency. While the Reserve Bank of India (RBI) had reportedly explored the concept of introducing a universal “lagged credit” mechanism for transactions above a specified threshold, banks are advocating a more targeted, risk-based approach.

Rather than delaying every high-value transaction, banks believe that confirmation prompts should be triggered only when fraud detection systems identify elevated risk. Such a framework would enhance customer protection while minimizing disruption to genuine users.

Key Takeaways

• Banks have reportedly proposed a “Yes-No” confirmation prompt for high-risk UPI P2P transfers.
• The safeguard would apply only to transactions identified as suspicious by fraud detection systems.
• Customers could immediately approve or cancel the transaction, while non-response may result in a one-hour delayed credit.
• The proposal is intended for P2P transfers only and would not affect merchant (P2M) payments.
• The objective is to strengthen fraud prevention without compromising the speed and convenience that have made UPI the preferred digital payment platform.

Conclusion

As digital payment frauds become increasingly sophisticated, financial institutions are focusing on risk-based security measures that protect customers without undermining the efficiency of instant payments. The proposed “Yes-No” confirmation prompt represents a balanced approach by introducing an additional layer of customer verification only for transactions exhibiting elevated fraud risk. If adopted, the initiative could significantly enhance trust in the UPI ecosystem while preserving the seamless payment experience that has driven its widespread adoption.